TI Moving Away from Foundry Business

One reason that Sun needed to find a new partner is that TI
is moving away from the foundry business to concentrate on other ventures. In
addition, Sun's approach to its UltraSPARC now focuses more on building a commodity
chip that requires different types of transistors, said Nathan Brookwood, an
analyst with Insight 64.
"With the older series of UltraSPARC chips, the key to the
performance was finding the fastest transistors possible," Brookwood said.
"Now, Sun is pushing more throughput and parallel computing, and the transistors'
[switching speed] performance is not as important as it used to be with the
older chips."

As a company, Sun has resisted going into the fab business.
Azhari said the company prefers the flexibility that comes with partnering with
Texas Instruments and TSMC. Fabs are also expensive undertakings. Intel, for
example, recently announced that it had spent about $3 billion to develop and
build a facility that opened in 2007.

Azhari declined to say which of Sun's microprocessors would
shrink to 45 nanometers. The company's next UltraSPARC chip, dubbed "Rock," is
now scheduled for release in 2009 and will be manufactured initially at 65 nanometers.
In the semiconductor business, both Intel and Advanced Micro
Devices are bringing their chips down to the 45-nanometer level. Intel is
already producing 45-nanonmeter x86 processors. AMD
is expected to make the switch later this year.
IBM is also working on
shrinking some of its processors.
The change from 65- to 45-nanometer microprocessors allows
vendors to place more microprocessors on each silicon wafer, which cuts costs.
On the technology side, Azhari said the move to 45 nanometers
will allow Sun to add more cores, add more instructional threads and cut down
on the power consumption while increasing the throughput of its new generation
of chips. It will also allow Sun to build more functionality into its
processors such as system-on-a-chip technology.
The agreement between Sun and TSMC covers the development of
45-nanometer processors. There is no agreement in place for when Sun turns its
attention to 32-nanometer chips.